IRS Pub 526, Charitable Contributions: AGI Floor, Limits, QCDs

The rules for claiming a charitable contribution deduction on your federal tax return come down to four gates a gift has to pass through: you must itemize on Schedule A, the recipient must be a qualified organization, your total giving is capped at a percentage of your adjusted gross income, and you need the right documentation for the size of the gift. Miss any one of them and the deduction disappears. For tax year 2026, a new floor also applies: only contributions above 0.5 percent of your AGI count.

You Have to Itemize First

A charitable gift produces tax savings only when your total itemized deductions exceed the standard deduction. For 2026, the standard deduction is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household.¹ If your mortgage interest, state and local taxes, and charitable gifts combined don’t clear that bar, itemizing costs you money.

The common workaround is bunching. Instead of giving $5,000 every year, you contribute $15,000 or $20,000 in a single year, itemize that year, and take the standard deduction in the off years. A donor-advised fund makes this practical: you fund the account in the bunching year and lock in the deduction then, even though the money reaches the end charities over time.

The New 0.5 Percent AGI Floor for 2026

Starting in 2026, only contributions exceeding 0.5 percent of your AGI are deductible. On a $200,000 AGI, the first $1,000 of giving produces nothing. On a $500,000 AGI, the nondeductible floor is $2,500. Bunching becomes more valuable under this rule because the floor bites once instead of every year you itemize.

Which Organizations Qualify

The deduction is limited to gifts made to organizations that hold tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. That covers religious organizations, hospitals, universities, and most nonprofits organized for charitable, scientific, literary, or educational purposes.² Contributions to federal, state, and local government entities also qualify when the gift serves a public purpose.

You can confirm status through the IRS Tax Exempt Organization Search at irs.gov.³ Churches and similar religious organizations aren’t required to apply for formal recognition and may not appear in the tool, but gifts to them are still deductible. For a smaller nonprofit that doesn’t show up, ask for its determination letter.

What Counts, and What Never Does

Deductible contributions include cash, checks, credit card charges, property, and unreimbursed out-of-pocket costs you incur while volunteering. If you buy supplies for a nonprofit event or drive on its behalf, those costs qualify. The charitable mileage rate for 2026 is 14 cents per mile, set by statute rather than adjusted for inflation.⁴

When you get something back for your gift, the deductible portion shrinks. Pay $200 for a gala dinner worth $75 and your deduction is $125. Charities are required to disclose the fair market value of any benefit provided when your payment exceeds $75.⁵

Some categories never qualify:

The value of your volunteered time and services, even professional expertise. Only out-of-pocket costs qualify.
Money given directly to an individual in need, no matter how deserving. The gift has to go through a qualified organization.
Political contributions to candidates, campaigns, or parties.²

Valuing Non-Cash Gifts

Property gifts are deducted at fair market value in the general case, but the exceptions matter. Property you held for one year or less (ordinary income property) limits your deduction to your original cost. The same restriction applies to business inventory and to artwork created by the donor.

Property held more than a year, such as appreciated stock or real estate, generally qualifies for the full fair market value. This is often the most tax-efficient way to give. Donating a stock position worth $50,000 that you bought for $10,000 produces a $50,000 deduction and skips the capital gains tax you would owe on a sale.⁶

Tangible personal property carries a related-use catch. If the charity doesn’t put the item to a use tied to its tax-exempt purpose, your deduction drops to cost basis. A painting donated to an art museum for its collection qualifies at fair market value; the same painting donated to a hospital that auctions it off does not.⁶

Clothing and Household Items

Clothing and household goods must be in good used condition or better to produce any deduction, and the IRS can deny items with minimal monetary value even when they clear that bar.⁷ A single item claimed at more than $500 in less-than-good condition is deductible only with a qualified appraisal and Section B of Form 8283 filed with the return.⁸

Vehicles, Boats, and Airplanes

If the charity sells your donated vehicle, your deduction is generally limited to the actual sale price, not a pricing-guide value. The charity must give you Form 1098-C or an equivalent written acknowledgment within 30 days of the sale. Full fair market value is available only in narrow cases: the charity uses the vehicle significantly in its operations, makes material improvements beyond cleaning, or gives or sells it at a steep discount to a person in need as part of its mission.⁹

Annual AGI Percentage Limits

Your total charitable deduction each year cannot exceed a percentage of your AGI, and the specific cap depends on what you gave and who received it:

60% of AGI for cash contributions to public charities (churches, hospitals, educational institutions, and most 501(c)(3) organizations).⁶
50% of AGI for non-cash contributions of property other than capital gain property to public charities.
30% of AGI for long-term capital gain property given to public charities, and for cash gifts to private non-operating foundations and certain veterans’ organizations.⁷
20% of AGI for long-term capital gain property given to private non-operating foundations.⁶

Contributions above the applicable cap aren’t lost. You can carry the unused amount forward for up to five years under the same percentage limits. Current-year gifts are used first, then carryforwards in chronological order, oldest first.⁶

Documentation the IRS Requires

Recordkeeping is where charitable deductions most often fall apart on audit, and the failures are usually procedural rather than fraudulent. The requirements scale with the size of the gift.

Any Cash Contribution

For every cash gift, no matter how small, you need a bank record (canceled check, credit card statement, or bank statement) or a written receipt from the charity showing the date, amount, and organization name.¹⁰ A text confirmation or verbal thank-you doesn’t count.

Gifts of $250 or More

A single contribution of $250 or more requires a contemporaneous written acknowledgment from the organization, in your hands by the time you file. It must state whether the charity provided anything in return and, if so, include a good-faith estimate of that value.¹¹ A bank statement will not substitute. Without the acknowledgment, the deduction is gone.

Non-Cash Gifts Over $500

When your total claimed non-cash deduction exceeds $500, you must file Form 8283 (Section A) with your return, listing the property description, approximate date of acquisition, cost basis, and fair market value.⁸

Non-Cash Gifts Over $5,000

When a single item or group of similar items exceeds $5,000 in claimed value, you move to Section B of Form 8283 and must obtain a qualified appraisal from a qualified appraiser. Both the appraiser and an authorized representative of the receiving organization must sign the form.¹¹

If You’re 70½ or Older: The QCD Alternative

Retirees who can’t clear the standard deduction have another route. A qualified charitable distribution lets you direct up to $111,000 per year in 2026 from a traditional IRA straight to a qualified charity, and the amount never enters your taxable income.¹² The QCD counts toward your required minimum distribution and works whether you itemize or not.

Because the distribution never hits your AGI, it can also reduce Medicare premiums, limit taxation of Social Security benefits, and preserve other income-based tax benefits. Report a QCD by listing the full IRA distribution on Form 1040 and entering zero (or the reduced amount) on the taxable line with “QCD” noted next to it.¹³

The distribution has to go directly from the IRA custodian to the charity. If the check is made payable to you and you forward it, the IRS treats it as a regular taxable distribution. A one-time election also permits up to $55,000 to be directed to a charitable remainder trust or charitable gift annuity.¹²

Penalties for Overstated Values

Aggressive valuations on non-cash gifts are a persistent enforcement target. Overstate the value of donated property by 150 percent or more of the correct amount and the IRS imposes a 20 percent accuracy-related penalty on the resulting tax underpayment. Overstate it by 200 percent or more and the penalty doubles to 40 percent.¹⁴

An appraisal in your file does not automatically protect you. The IRS evaluates whether your reliance on it was reasonable given the methodology, the assumptions, the gap between appraised value and purchase price, and any connection between the appraiser and the taxpayer.¹⁵ When property values are large enough to require an appraisal, use an independent, credentialed appraiser. That is where most overvaluation problems begin.

1
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One Big Beautiful Bill
2
Internal Revenue Service. Exemption Requirements – 501(c)(3) Organizations
3
Internal Revenue Service. Tax Exempt Organization Search
4
Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile, Up 2.5 Cents
5
Internal Revenue Service. Charitable Contributions: Quid Pro Quo Contributions
6
Internal Revenue Service. Publication 526 (2025), Charitable Contributions
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Office of the Law Revision Counsel. 26 U.S. Code 170 – Charitable, Etc., Contributions and Gifts
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Internal Revenue Service. Instructions for Form 8283 (Rev. December 2025)
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Internal Revenue Service. IRS Guidance Explains Rules for Vehicle Donations
10
Internal Revenue Service. Charitable Contributions: Written Acknowledgments
11
Internal Revenue Service. Substantiating Charitable Contributions
12
Internal Revenue Service. Notice 25-67: 2026 Amounts Relating to Retirement Plans and IRAs
13
Internal Revenue Service. Seniors Can Reduce Their Tax Burden by Donating to Charity Through Their IRA
14
Office of the Law Revision Counsel. 26 U.S. Code 6662 – Imposition of Accuracy-Related Penalty on Underpayments
15
eCFR. 26 CFR 1.6664-4 – Reasonable Cause and Good Faith Exception to Section 6662 Penalties